Car and watch finance

[Mouse]

Why is it bizarre that schools don't teach things that aren't on the curriculum? I'm not a teacher but it "grinds my gears" when people say "why don't schools teach XYZ?" when they never have taught XYZ and XYZ is something parents should be teaching their children. What proportion of a child's time in a year is spent at school? There is a limit to how much time there is in formal education and parents need to take some responsibility for educating their children how to be grown ups.

+1

[Stringer]

Why is it bizarre that schools don't teach things that aren't on the curriculum? I'm not a teacher but it "grinds my gears" when people say "why don't schools teach XYZ?" when they never have taught XYZ and XYZ is something parents should be teaching their children. What proportion of a child's time in a year is spent at school? There is a limit to how much time there is in formal education and parents need to take some responsibility for educating their children how to be grown ups.

Yes, parents should of course take responsibility for educating their kids, and a lot do - but an awful lot also don’t. In many cases, the parents may be as feckless as the child, not only failing to explain the pitfalls but also setting the bad example to follow.


I don’t remotely advocate teachers being burdened with surrogate parenthood or being blamed for wider societal ills - there’s too much of that - but if there is space in the school day for careers advice, PE, home economics, social studies, RE and all manner of other things, then I don’t think it’s asking too much to carve out a little time for some financial guidance also.


The world is also changing, and financial matters are even more relevant to children today than they were 25 years ago. Teenagers didn’t use to have to have to deal with mobile phones on contract, cars on PCP, Apple Pay, online gambling, reduced job security, increasingly-lengthy mortgage terms, work-enrolled pensions etc. Just because things weren’t taught in our day doesn’t mean they shouldn’t be included now.


Not everyone leaves school to become an entrepreneur, astronaut or scientist - but virtually all will come into contact with financial products at some stage.


Isn’t that part of the role schools should play (alongside parents & other institutions), not just to educate but also to help prepare children for adulthood in general?

[Skyman]

Well if you call buying over a dozen Jaguars, over a dozen classic motorcycles, upto 4 houses at the same time as well as a very expensive English shotgun and a load of foreign holidays dull, then yes I led a dull existence.

My, your success is a source of great inspiration. Particularly when juggling your round at the same time.

[Mystery Scott]

This is a conversation I had with a friend who earns 6 figures but never puts down more than 10% on a car, so he currently has a 70k loan on his Porsche and only £150k equity in his flat. He literally called me stupid for paying for my car cash and said that the guaranteed future value thing means that he loses less money than I do....even though he has newer and more expensive cars which depreciate more and he pays 6% interest.

This attitude of ‘with PCP you’re only paying the depreciation’ is terrifyingly ignorant when rates can be in the double digits.

[Mystery Scott]

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The world is also changing, and financial matters are even more relevant to children today than they were 25 years ago. Teenagers didn’t use to have to have to deal with mobile phones on contract, cars on PCP, Apple Pay, online gambling, reduced job security, increasingly-lengthy mortgage terms, work-enrolled pensions etc. Just because things weren’t taught in our day doesn’t mean they shouldn’t be included now.


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And when I was a kid I didn’t have to deal with Instagram which those under 30 seem to believe is representative to real life when to us it’s clear that a lot of the posing is just fakery.


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[gbn13]

Sorry to quote this in full but I’d like to nominate this for post of the week.

Agreed and very much on the money.

[TKH]

Agreed and very much on the money.

thanks guys...its a sad state of affairs IMHO and I write from experience of observing it 1st hand.

I agree social media is a seriously ruinous thing for young easily influenced kids they believe they should have everything and straight away and if they don't get it there somehow second class, they display their new stuff on the internet looking for adulation then somebody pops their bubble with a better car, phone, holiday or dress and there response ....spend more either from family or on a card or from job income yet have no savings for the next stage in life.

parents need to get a grip and say NO and teach kids the value of money ...as the saying goes 'they know the price of everything and the value of nothing'

I had a mad idea years ago cancel German lessons 3 times a week and have 'Money' lessons instead

this weeks subject "Interest Rates'
next week "Mortgages'
next week 'Credit cards'
next week 'household bills'
next week 'Insurance'
next week 'budgeting monthly income vs expenditure'
next week 'national debt' !!!!
next week 'pensions'
next week 'Loans HP or PCP'

so many kids still learn German and have never uttered a word of it since leaving school at 16

every kid needs to learn about money.

[Devonian]

I’m fairly sure Interest rates will stay relatively low for a long period of time, so that’s not the concern. The concern with money is history repeating itself - when loans and credit cards are easy to get and incredible deals on them, that’s the time to start worrying as everyone buys in the never never. We’re close to being at that time again. Whilst money is obtainable it’s fine, but as soon as there’s a squeeze and the money markets dry up then things get worse. In 2007 almost overnight money became hard to get hold of and things went bad.

I’m against frivolous borrowing as I’ve seen people lose everything and the article with the girl concerned was ridiculous as she clearly couldn’t afford it. However . . . . I do think in general - rent whatever goes down in value and buy whatever goes up. Leasing cars to me is far better than buying. That’s if you’re looking at news cars.

[MCFastybloke]

Paying interest on a loan to buy a depreciating asset?

Crackers.

Its relative to how your own money is performing

[RobDad]

Why is it bizarre that schools don't teach things that aren't on the curriculum? I'm not a teacher but it "grinds my gears" when people say "why don't schools teach XYZ?" when they never have taught XYZ and XYZ is something parents should be teaching their children. What proportion of a child's time in a year is spent at school? There is a limit to how much time there is in formal education and parents need to take some responsibility for educating their children how to be grown ups.

I thought Maths was on the curriculum? Maybe if schools applied it to real life as opposed to isosceles triangles and Pythagoras the world might be a better place. If it’s not in the curriculum it should be, and in case you hadn’t paid attention I am teaching my kids myself. Sadly not all parents understand finance and money, imho it’s the kids of these people who the system fails, and so the cycle of ignorance and poverty continues. Frankly, schools and their idiotic target chasing grind my gears, glad my kids are on the very tail end!


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[Passenger]

Strong rational argument for not having kids, if you don’t yourself understand the basics of money and debt and preferably have a reasonably well established, fairly secure financial position. Though when did reason come into it.

[LorneG]

I thought Maths was on the curriculum? Maybe if schools applied it to real life as opposed to isosceles triangles and Pythagoras ...
Frankly, schools and their idiotic target chasing grind my gears, glad my kids are on the very tail end!


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Isosceles triangles and pythagoras are real life! The most basic of the mathematics required to be an engineer, and without engineers there'd be nothing; no BMW's, hospital equipment, machinery to make bling bags for numpties, no electricity or petrol, airplanes or anything else.

And without even the most basic of maths that a lot of today's kids haven't got a scooby doo about, what hope is there for them to assess what a percent actually is? 10%, 'dunno mate, it's boring init. don't need it anyway coz I'm going to be a social media influences and get tons of free stuff. bought this on finance coz I wanted it and the man said it was a good deal.'

Agree that schools chasing exam rankings doesn't help with anything. Both my kids schools have stopped publishing them.

[peterdo]

PCP is a terrible finance product, the straight maths prove that one out, high deposit and similar monthly payment with a typically higher APR.

I use a personal lease, absolute no brainer...effectively saved £8k on deposit on the car vs PCP and have zero depreciation risk other than excess mileage. Most deals allow you to walk away for 50% of outstanding payments adjusted for mileage use.

Other tip is never lease from a mainstream dealer, sites like Autorama are great value

As for watches, if you’re being offered 0% interest, if you can afford the payments and keep the cash in the bank, feels like a decent deal


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[RobDad]

Isosceles triangles and pythagoras are real life! The most basic of the mathematics required to be an engineer, and without engineers there'd be nothing; no BMW's, hospital equipment, machinery to make bling bags for numpties, no electricity or petrol, airplanes or anything else.

And without even the most basic of maths that a lot of today's kids haven't got a scooby doo about, what hope is there for them to assess what a percent actually is? 10%, 'dunno mate, it's boring init. don't need it anyway coz I'm going to be a social media influences and get tons of free stuff. bought this on finance coz I wanted it and the man said it was a good deal.'

Agree that schools chasing exam rankings doesn't help with anything. Both my kids schools have stopped publishing them.

Ok I kind of thought that as I wrote it - just making a broad point badly, isn’t that how forums work


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[LorneG]

Ok I kind of thought that as I wrote it - just making a broad point badly, isn’t that how forums work


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It is, and similarly I was just defending the honour of engineers. I agree that the average person working in McD or a supermarket probably doesn't have much need for triganometry, but the lack of knowledge might be part of the reason they're working there. I suspect they're also the people generally caught out by the mentality of 'if its offered to me it must be ok'

[Mouse]

Hooray for Pythagoras :-)

[Mystery Scott]

The obvious flip side of QE/ultra loose credit is the rise in RRPs, both watches and cars. Bog standard family hatches well over £20k list now.

One advantage of paying cash for everything is that this registers, and I practice what I preach: no expensive watches and an excellent non prestige car bought 2 years old for £9k, about 40 percent of list.

Prestige non-4x4s are even better for the second hand buyer. I got an 18 month old, 30,000 mile mercedes cls for £27,000 (from mercedes dealer with full warranty etc) and the new list price has been £57,000. BMW 5 series and Mercedes E-Classes are even better. It’s all crazy.


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[julian2002]

I bought a watch on finance.
I saw a watch I wanted and could have bought it outright however there was a 0% deal running if you put a chunk of deposit down.
Better the money in my pocket earning whatever pittance of interest I can find than in their pocket doing the same.
I plan on clearing the payments in the next few months as we are looking to buy a new house.

[Mark020]

Interesting discussion. I've never bought a new car (and don't think I will ever do it) but I like the finance to get more discount and immediately pay off trick

[NikGixer750]

I do not see anything wrong with using finance, personally I would not buy a watch on finance or a holiday etc. Cars I do not see an issue, just got a 2nd hand 240i 3 years old so already lost the big hit on depreciation and took a loan to pay for around 60% of it, on a personal loan at a tiny apr. I will never buy a new car, the losses are just so high. Monthly payments are not an issue and I would rather have something nice and a some finance than a older car I will not enjoy as much. I can see why most cars are financed, the average person does not have £5-10k free to buy a car, yet alone £30+k for something new.

[Irish boy]

I remember my mortgage interest rate going up by 250% when I "were a lad"! I never got caught out with borrowing again after that. If I can't afford something, it stays on the shelf! Something that the buying public need to consider as an option before we all drown in credit!

Thats nuts. If something like that happened today the country would literally fall flat on its face.

[Suds]

Thats nuts. If something like that happened today the country would literally fall flat on its face.

The 20 year average MIR was 8.5% when I bought my first home. It rose above 14.5% 12 months later. I do worry for people with mortgages at present - good times are always followed by bad.

[LorneG]

Thats nuts. If something like that happened today the country would literally fall flat on its face.

I seem to remember that's what happened then as well. 'Black Wednesday'

[Omegamanic]

I see nothing wrong with financing anything you like - it’s just a personal choice to make.

[Buster73]

I see nothing wrong with financing anything you like - it’s just a personal choice to make.

This , how people pay for anything is of no concern to anyone but themselves.

What makes me smile is the I have the cash in the bank but take 0% finance instead type of post , keep it to yourself , nobody cares less what your financial status is man.

[NigeG]

PCP is a terrible finance product, the straight maths prove that one out, high deposit and similar monthly payment with a typically higher APR.

I use a personal lease, absolute no brainer...effectively saved £8k on deposit on the car vs PCP and have zero depreciation risk other than excess mileage. Most deals allow you to walk away for 50% of outstanding payments adjusted for mileage use.

Other tip is never lease from a mainstream dealer, sites like Autorama are great value

As for watches, if you’re being offered 0% interest, if you can afford the payments and keep the cash in the bank, feels like a decent deal


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PCP is not a terrible deal when it’s sold correctly and in the right circumstances. Typically it should be a lower deposit, reasonable GFV (guaranteed future value) and monthly payments that attract interest, which is often supported by the manufacturer to a lower interest rate.

The manufacturer, and dealer, wants you back to repeat the process ideally before your agreement expires to keep you in a new car every couple of years.

Ideal scenario is you typically put in 10% deposit. GFV is set low enough that when you come back in three years time you’ve still got the lions share of that deposit as equity (actual trade value minus GFV) to put into the next vehicle. Repeat cycle.

Of course it can go wrong if the GFV is set too high - less or even no equity at the end. You massively go over the contracted mileage - hits the equity again. Plus a heap of other potential pitfalls, but it’s not a terrible product.

[Passenger]

This , how people pay for anything is of no concern to anyone but themselves.

What makes me smile is the I have the cash in the bank but take 0% finance instead type of post , keep it to yourself , nobody cares less what your financial status is man.

I totally agree in principle with your first point however the last financial crises began when a lot of folks in the US were mis sold mortgage products they couldn't afford, 'ninjas' they were called, no income no job applicants, those toxic mortgages were then chopped up and fraudulently introduced to the global money system as triple A rated investable debt and all hell as we know ensued, trillions in taxpayer bailouts and interest rates have sunk to and remain at historic lows.
So IF enough people make poor decisions and financial instituions looking for a quick profit fail to self regulate/observe rules/laws, then the whole edifice is threatened.

[Speedy2254]

Plus 1

Plus 2, succinct & illustrative.

[Stringer]

What makes me smile is the I have the cash in the bank but take 0% finance instead type of post , keep it to yourself , nobody cares less what your financial status is man.

In the majority of instances, I suspect that such a statement is less a boast about the extent of their bank balance, and more a rebuttal to those frequent naysayers who seem to think that buying a luxury item on finance automatically means the buyer can’t really afford to make the purchase in the first place.

The buyer is saying the finance route is/was a deliberate choice by them, rather than the only viable route to ownership.

[D4RW1N]

There's very clearly two schools of thought here with one extreme being that any form of credit is the spawn of the devil.

Personally I like to think I have a balanced view and think there is nothing wrong with sensible, intelligent use of credit.

I've used both interest free credit to buy watches and finance deals for cars. I currently lease and if you want/ need to change cars every 3 or 4 years, there are some great deals around, which are also low risk (in terms of depreciation, major mechanical costs etc) options of owning/ running a car.

I can also see though that if you want to run a car for say 10 years and do fairly low mileage, buying outright at a discount/ nearly new also makes sense.

Also, if you have a healthy secure income, but not loads of spare capital laying around, sensible low/ no interest credit is a great option. On the other hand, if you are capital rich/ income poor, paying cash makes absolute sense.

In summary, it all depends on someone's financial position, outlook and appropriate use of financial resources, but nothing wrong with using low cost credit in an overall well managed budget.

[mitch1956]

funny cars I wont and never have bought on finance tec, as the world moves forward the days of actually owning private cars will fade disappear I truly believe , I am mortgage free ( have been for 15 years) have bought the last 4 of my watches via various forms of 0% finance and sleep soundly knowing I am using someone else's money to buy the things I want , but I can pay all finance off I wanted /needed.

[JonRA]

I've never liked borrowing - apart from mortgages the only interest I've ever paid was on a loan for 500gbp to buy a motorbike in the 70s which I used to get to work.



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[MartynJC (UK)]

Arse - this belongs to G&D

[thegobetween]

Dealers literally don’t want cash sales. I tried to buy a BMW i3s, asked for cash price. Out trots finance guy (who I didn’t ask for) who states finance deals as they make more money from it! I kindly mentioned I’d hope the deal would benefit me as well to which he stated it’s a business! (I do understand this aspect as a business owner, yet I wouldn’t dare tell my clients let’s work a deal this way as I can earn a greater amount!)

[Mouse]

I've never liked borrowing - apart from mortgages the only interest I've ever paid was on a loan for 500gbp to buy a motorbike in the 70s which I used to get to work.



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I've never minded borrowing. It was the paying it back that I hated :-)

[RJM25R]

Dealers literally don’t want cash sales. I tried to buy a BMW i3s, asked for cash price. Out trots finance guy (who I didn’t ask for) who states finance deals as they make more money from it! I kindly mentioned I’d hope the deal would benefit me as well to which he stated it’s a business! (I do understand this aspect as a business owner, yet I wouldn’t dare tell my clients let’s work a deal this way as I can earn a greater amount!)

Were you happy to buy at the list/advertised price, or were you negotiating?

[thegobetween]

Were you happy to buy at the list/advertised price, or were you negotiating?

Negotiating. Same car at another dealers was cheaper thus I asked them to match their offer.

[LorneG]

Dealers literally don’t want cash sales. I tried to buy a BMW i3s, asked for cash price. Out trots finance guy (who I didn’t ask for) who states finance deals as they make more money from it! I kindly mentioned I’d hope the deal would benefit me as well to which he stated it’s a business! (I do understand this aspect as a business owner, yet I wouldn’t dare tell my clients let’s work a deal this way as I can earn a greater amount!)

Can we add PC World to the list. I know there isn't a list, but I went in there to buy a new monitor yesterday:

'May I recommend this monitor instead'
'no thankyou, it's twice the price for the same thing'
'would you like our 3 year finance?'
'no thank you'
'would you like our 3 year warranty'
'no'
'insurance?'
'no'
'can we add you to our ....'
'no'
'would you like ....'

'stop it!, I just want to buy the bloody monitor - this one, now, with cash'

talk about 'up-selling'

[synequano]

I don’t follow the whole discussions but in my country,the hurdle of buying car/motorcycle in cash is huge....the waiting list for paying cash is longer than if you buy through credit (6 vs 3 months,roughly)...for motorcycle it’s even worse as you simply couldn’t get a new one if you pay cash

The interest rate for car is around 5% per annum which still isn’t that bad

While on watches,I heard from someone I know in financial services that there are many people who can get 2 years interest free credit for watch (which is wayyy beyond their income level) but ended up couldn’t afford to pay...but when the watch is about to be repossessed,it’s already sold or reported as stolen...I know certain bank manager with around $1k monthly income managed to finance AP ROOC...(yes,the income level in my country isn’t that high,but the offers <or rather temptations> for hedonistic consumptive lifestyle is huge)

[blackal]

I don’t follow the whole discussions but in my country,the hurdle of buying car/motorcycle in cash is huge....the waiting list for paying cash is longer than if you buy through credit (6 vs 3 months,roughly)...for motorcycle it’s even worse as you simply couldn’t get a new one if you pay cash

The interest rate for car is around 5% per annum which still isn’t that bad

While on watches,I heard from someone I know in financial services that there are many people who can get 2 years interest free credit for watch (which is wayyy beyond their income level) but ended up couldn’t afford to pay...but when the watch is about to be repossessed,it’s already sold or reported as stolen...I know certain bank manager with around $1k monthly income managed to finance AP ROOC...(yes,the income level in my country isn’t that high,but the offers <or rather temptations> for hedonistic consumptive lifestyle is huge)

Which country?

[JonRA]

I've never minded borrowing. It was the paying it back that I hated :-)

LOL :)

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[synequano]

Which country?

I’m staying in Indonesia...